May 302017
 

Former MEP Andrew Duff is credited with the formulation of “Article 50”. He has written a fascinating 4-page discussion paper entitled Brexit: Time for plan B for the Brussels-based European Policy Centre.

The likely disagreement

He analyses the diametrically opposed negotiating positions of the UK and the EU27 (links to which I included in my blog post yesterday). He reminds us of Theresa May’s vacuous ‘No deal is better than a bad deal’ soundbite, which is as uncosted as the Conservative party manifesto.

He concludes that the talks between the UK and the EU27 could break down before they reach the end of Phase 1 – namely “sufficient progress” being made on agreeing the principles of the three key issues regarding citizens’ rights, the financial settlement and maintaining a soft border between Ireland and Northern Ireland.

“No deal”

In that case, the UK would leave the EU at midnight on 29 March 2019 (2 years after Theresa May’s Article 50 notification letter) without any agreement or transitional arrangements. You only need to look at the trade data to realise that the UK would have a lot more to lose than the EU27 if this were indeed to happen.

In 2014, total exports of goods and services to the EU were £228,893 million and total exports of goods and services worldwide were £515,191 million. This made exports to the EU 44.4% of the total. The US is our next biggest export market, accounting for 17% of the total. – The Pink Book, Office for National Statistics, October 2015, Table 9.3.

From midnight on 29 March 2019, the UK would then trade with the EU under WTO rules. The implications of that were set out in the UK Government’s pre-Referendum paper Alternatives to membership: possible models for the UK outside the EU :

  • WTO rules represent a minimum threshold. It would be the most definitive break with the EU, offering no preferential access to the Single Market, no wider co-operation on crime or terrorism, no obligations for budgetary contributions or free movement of people.
  • If we did not manage to secure an agreement on better terms, we would be forced to revert to this model. This would cause a major economic shock to the UK, with serious consequences for companies, consumers, jobs and prices.
  • The UK would face immediate and heavy costs to our trading relationships, both with the EU and with the wider world. If reciprocal tariffs were introduced on imports from the EU, these goods would become more expensive.
  • UK nationals would not have the rights that they currently enjoy to live, work and travel in the EU.
  • Under WTO rules neither the UK nor the EU could offer each other better market access than that offered to all other WTO members.
  • Our privileged access to 53 markets outside the EU through the EU’s Free Trade Agreements would be terminated. We could seek to negotiate new agreements, but this would take years. It would be difficult to replicate the terms that we currently enjoy.

Moreover, the UK would no longer be a member of the European Investment Bank and, if it fails to pay what it owes to the EU, which other country is ever likely to trust it with a trade deal?

The rosy ambition of the Leave campaigners for the UK to negotiate trade agreements with its former colonies presumes that the latter have forgotten their past, usually-unhappy experiences under UK rule. Shashi Tharoor’s comments at the Oxford Union a couple of years ago (see the 15-minute video above) illustrate why these former colonies fought for their independence from the UK to “take back control”.

Even Brexit Minister David Davis has said that “If we fail, the consequences for working people will be dire.”

The only plan B which could save working people in the UK from Theresa May and Jeremy Corbyn

At a live event in Brussels earlier this month, Martin Selmayr, the Head of Cabinet of European Commission President Jean-Claude Juncker, was asked (see the video of the event from 43:15) whether a new UK Government could withdraw the Article 50 notification made by its predecessor. His reply was that it could not be withdrawn unilaterally without the agreement of the other Member States but that, if that situation were to arise, the other Member States would probably not insist that the notification could not be withdrawn.

For the UK, this would seem to be the only viable Plan B which would be in the best interests of the country. After a Referendum called in the best interests of the Conservative party (not the country) and a General Election called in the best interests of the Conservative party and Theresa May (not the country), this plan B could only happen if there is a majority of anti-Brexit MPs elected to the House of Commons on 8 June.

Come to think of it, since neither Theresa May nor Jeremy Corbyn seem to have much of a plan for Brexit, shouldn’t this be the UK’s plan A?

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